Olympic Opportunities

An Expert's View about Building Products and Construction in Russia

Last updated: 19 Feb 2011

The Russian government is using the 2014 Games as a catalyst for development of the city of Sochi, the 1000-km of the Russian Black Sea coastline, and the whole region of Krasnodar Krai.

Sector briefing Olympic Opportunities in Russia Why Russia? The Russian government is using the 2014 Games as a catalyst for development of the city of Sochi, the 1000-km of the Russian Black Sea coastline, and the whole region of Krasnodar Krai. The long-term aim is to boost the local tourism industry, which is currently largely domestic, by delivery of improved facilities on the coast- line and the world-wide exposure the 2014 Winter Games will generate. The opportunities are enormous, from construction, engineering, environmental ?The Russian government is technologies and hospitality, through to using the 2014 Games as a logistics, security, IT and creative industries. catalyst for development of Find general information on the Russian market the city of Sochi, the 1000- conditions on UKTI?s website. The Doing km of the Russian Black Sea Business Guide for Russia gives an overview of coastline, and the whole Russia?s economy, business culture, potential region of Krasnodar Krai?. opportunities and an introduction to other relevant issue. UK Trade & Investment Sector briefing: Olympic opportunities in Russia Opportunities About 80% of the venues needed for the 2014 Games will be built from scratch. On 4 July 2007, the International Olympic The ratio between public and private Committee announced that Sochi Olympic and investment into the Olympic projects is Paralympic Winter Games will take place in expected to be 70:30. Sochi from 7 to 23 February, the 2014 Paralympic Games - from 7 to 16 August. Currently the key private sector investors are Gazprom, Interros, Sberbank, Rosneft and The slogan of the Olympic Games in Sochi is Russian Railways. ?Gateway to the Future? with the aim to: Gazprom's spending on preparations for the ? transform Sochi into a year-round tourist Sochi Olympics is the largest of all the destination; investment plans for the 2014 Winter Games. ? develop Russia?s first world-class ski resort; The company intends to invest RUR 68 billion ? create a centre for winter sports in Russia; (C USD 2 billion) in the construction of facilities ? establish Russia?s first alpine, sliding and for the 2014 Winter Olympic Games in Sochi by ski jumping centre; 2012. RUR 28 billion (C USD $ 930 million) of ? implement Russia?s new philosophy of this sum was invested by Gazprom in 2009. investing domestically for the future. Gazprom's investment targets include a skiing Olympic opportunities for UK are enormous ? complex, a four-star 600-beds hotel for skiers key areas are detailed below. 1,500 meters above the sea level and a new gas pipeline with an annual capacity of 3.27 billion cubic meters. Construction The official delivery plan records some 218 Housing projects to be constructed in Sochi. More than For the Sochi Games two Olympic villages will 1 trillion roubles (C USD 35 billion) will be be constructed, the main of them will be spent between 2009 and 2012 on the situated at the Black sea coast, the additional ? preparations for the 2014 Winter Olympic in mountains. For accommodation of visitors Games with 699.3 billion roubles (C USD 23.31 and participants of the Sochi Games it is billion) allocated from the federal budget. planned to create 6 348 five-star rooms, 17 483 four-star rooms, 24 016 three-star rooms The projected budget for construction of 12 and 9 052 two-star rooms. custom-built sports venues, located in two clusters (the "Coastal Cluster" for ice events According to the forecast of social and and the "Mountain Cluster" in Krasnaya economic development in 2009 ? 2011 more Polyana) is about 200 billion roubles (C USD than 2,1 mln sq m of housing in Sochi should 6.6) billion. The operating budget for the actual be constructed. The housing in the city will games is USD 1.8 billion. then increase from 18,2 sq m per person in 2007 to 20,8 sq m in 2011 and the The biggest spending is planned for 2010, RUR construction in the city will reach 500 ? 700 348.7bn (C USD 11.6billion), including RUR thousand sq metres a year. By 2032 the 228 billion (C USD 7.6 billion) from the federal personal space of each inhabitant of Sochi will budget. In 2011 spending is planned at RUR make already 32 metres, and all existing 307 billion (C USD 10.2 billion) and in 2012, at available housing will increase from 7?330 to RUR 216.5 billion (C USD 7.21 billion). 20?080 sq metres. Construction on some venues, like the skating Sixteen new hotels will also be built, while 10 and curling centres, have already started, while existing ones will be remodelled. Sochi is the Alpine slopes have all been designed and virtually doubling in size to meet the new prepared. Construction on all other venues will demands for 2014 and beyond. Its expansion is have start in the first quarter of 2010. aimed at increasing tourism industry from The first official test event in Sochi will be the current USD 5 billion to USD 8-10 billion after European Cup in Alpine skiing in February 2014. 2011. More than 70 test events in different sports will be held in 2012 and 2013. UK Trade & Investment Sector briefing: Olympic opportunities in Russia Total camping capacity should grow by 2032 flights. But this will be more than doubled with up to 220 thousand places. The number of the opening of the new state-of-the-art health-resort visitors will reach eight millions. terminal. The boarders of the city will change: Sochi will The new building of the airport was built in expand from 17 677 to 22 236 hectares by 2007 but has not started its operation. The reduction of the former farmlands and State building is over 60,000 square meters in size. forest fund. Access to the aircraft boarding area is provided by 11 boarding bridges. The parking lot can accommodate up to 1,000 automobiles. The Infrastructure handling capacity is 2,500 passengers per day, The plan requires delivery of complex of those 2,000 on domestic flights and 500 on infrastructure projects, including more than international flights. 100km of railway lines, 75km of highways, 19 flyovers, 20 tunnels, 5,000m of mooring The top management of the new airport installations, a new waste processing plant, terminal plans that all of the latest in airport and a port for a capacity of 10 ships and 300 technologies will be used in the Sochi airport. yachts, plus goods terminals and port stations. Among them: 100% three-tier baggage check and automatic sorting, an integrated safety Airport capacity is doubling to take 2,500 system, including video surveillance; controlled passengers an hour. access; video identification; biometric systems; 24-hour safety monitoring of the terminals. 37 km of temporary technical roads have been laid, 10 temporary bridges across the Mzymta The airport will also be equipped with modern River have been put to commission as well. IT systems meeting the requirements of IATA Over 9 thousand people are working now at (DCS, AODB, FIDS, RMS, CUTE-CUSS, e- the construction of an integrated motor- and ticketing and RFID-bag identification). There railway road Adler- Krasnaya Polyana that will will be systems integrated to allow passengers link the Mountain and the Coastal clusters. It with disabilities access to the entire airport. will be put into commission in 2013. The Sochi airport has positive experience in Construction of 22 out of 26 permanent bridges cooperation with leading international has already started. companies on matters of technology. The Sea port and the Freight Yard started their Railway operation in 2009. The state company Russian Railways is playing a major role in preparing Sochi for the Olympic Airport Games. A specialised railway will be created to Sochi International airport holds the 9th place connect the Olympic Park, the airport and the among the largest airports in Russia, handling venues in Krasnaya Polyana. About 150 over 1.5 million passengers every year. It is millions rubles have been allocated for this currently served by 35 airlines, including project in 2008. The line will be commissioned Austrian Airlines and Latvian AirBaltic, which th in the 4 quarter of 2011. now operate regular and charter flights to 50 domestic and international destinations. Russian Railways plan to improve access to Sochi by establishing a high-speed Moscow- Investment in Sochi airport will reach Adler link (capable of speeds of 200 km/h), approximately £5.5 billion by 2014. With its thanks to which travelling from Moscow to two crossed runways, Sochi airport is now able Sochi will take just 15.5 hours. Stations are to handle all but the largest commercial being modernised for people with disabilities. aeroplanes being used in Russia and abroad. Fully-equipped permanent aircraft storage areas can accommodate up to thirty-nine Cross-sectoral opportunities aircraft at the same time. Contracts arising from the Games cover all sectors, from architecture, engineering, Handling capacity of the airport is 800 construction management, transport, security, passengers per hour on domestic flights and environmental planning, power engineering, 130 passengers per hour on international sport venue fit out (plant and equipment, UK Trade & Investment Sector briefing: Olympic opportunities in Russia seating, surfacing, lighting, IT), through to park and the year round congress expo-centre event delivery (security, recruitment, will be built there. volunteering programmes, training, broadcasting, event management, media After the Olympic Games it is planned to use signage, ticketing, screens, temporary overlay, the Olympic stadium as a football arena, the crowd control, transportation and branding), skating centre as an exhibition centre, the Ice hospitality and catering. Palace of sports as the business and exhibition centre. There has been identified a particular interest in UK companies providing newest technologies ? Krasnaya polyana is Russia?s first in construction, design and engineering world-class ski resort. Bobsleighing track, services, project management, security ?Rosa Khutor?, ?Alpika-Service?, ?Khrebet equipment and security control management, Psehako? complexes and the curling arena will legal advice, sound and broadcasting be used as the national training base and the equipment, telecommunication equipment, venues for international competitions. environmental friendly vehicles, special equipment for the Paralympic Games and disabled people, as well as education services. Olympic key players ? The Sochi Organising Committee ?Sochi 2014? is managing the delivery and The Olympic Legacy staging of the Games. A sustainable legacy is one of the strategic goals of the Sochi 2014 project. The core President, CEO concept around the programme ?The Olympic Mr. Dmitry Chernyshenko Legacy? is for creation of sports legacy to develop Sochi as a sport centre. It is aimed for Address: the development of business and cultural 40/3, Bolshaya Ordynka str. tourism for the low season. There are also 119-17, Moscow plans to grow Sochi as a recreational and Tel/fax: +7 495 984 20 14 educational centre. www.sochi2014.com The big Sochi territory is bigger than Moscow. Representative office in Sochi: It is planned to zone the city and develop each 73, Kurortny prospect zone according to various strategies. 354002, Sochi Tel: +7 (8622) 96 82 00 ? Lazarevskaya is a very important region of the Big Sochi. It will be developed ? State Corporation Olympstroy (SC into a traditional family resort featuring ?Olympstroy?) is responsible for building the inexpensive cosy hotels, paid parking places, venues and infrastructure. the middle price service and the clean sea. It is planned that the resort will get more than one President million tourists and relieve the central part of Mr. Taymuraz Bolloyev the Big Sochi. Address: ? The central part is a respectable area Bld. 1, Teatralnaya alleya 3 where the new quay will be built. It will 125167, Moscow become the centre for evening entertainment Tel: +7 (495) 989 79 00, ext 12-02 with a lot of greenery, bars and restaurants. Fax: +7 495 989 79 37 E-mail: info@mail.sc-olympstroy.ru ? Adler should remain a big tourist www.sc-olympstroy.ru centre, where small private hotels and large hotels will be situated. Tender department: Tel: +7 495 989 79 00, ext 13-04 ? Imeretinka is the only place in Sochi (construction), ext 13-20 (design) where the beach is sandy. Luxurious five-star hotels will be situated at the seaside, a little Representative office in Sochi: further ? four and three-star hotels. One of the 37, Kurortny prospect best in Europe and in the world amusement 354000, Moscow UK Trade & Investment Sector briefing: Olympic opportunities in Russia Tel: +7 (8622) 43 40 49 UK companies in Russia. A significant number of British firms have ? Olympic Games Transport already won contracts to work on the Games. Directorate is a management body for design They are involved in design of the masterplan and construction of infrastructure projects for and overlay plan for competition and non- the Olympic Games in Sochi. competition venues, design of individual sports venues, construction project management, General Director provision of legal, financial and strategic Mr. Sergei Kozyrev communication advice and supply of construction equipment. Address: Bld. 1, Rozhdestvenka str., 1 The organisers of Sochi 2014 are open to 109012, Moscow involving a diverse range of international Tel: +7 495 626 14 54 suppliers of products and services, with E-mail: office@tdog2014.com German, Turkish, Austrian, Canadian and www.tdog2014.com Scandinavian companies being already involved. Representative office in Sochi: 37, Kurortny prospect 354000, Sochi UKTI achievements Tel: +7 (8622) 43 40 49 For the last 2.5 year UKTI Russia in partnership with UKTI Major Sports projects team have been working hard to provide UK companies with advice and practical support in accessing Comparing to other Olympic Games. business opportunities emerging in Sochi. Under the various data, Olympic Games in Sochi are going to cost up to USD 35 billion. A Host2Host Memorandum of Understanding These are going to be the most costly Games between UK-Russia was signed in June 2009 in in all Olympic history ever. On average, St Petersburg by Trade and Investment expenses in Salt Lake City and Turin were 3-4 Minister Lord Davies and the Russian Minister times less than ones planned in Sochi. of Regional Development. Olympic costs/billion dollars Host2Host aims to convert sporting ambition Salt Lake City 1,3 into economic success. It provides a platform Turin 4,1 for sharing information on strategies and Vancouver 1,9 programmes for maximising trade development Sochi 12 - 35 and inward investment arising from the Olympic and Paralympic Games, including Amount of sports objects built for Olympics facilitation of trade missions and networking Salt Lake City 11 events. Mechanisms are now in place to share Turin 65 information and experience. Vancouver 12 Sochi 12 During 2009-2010 financial year UKTI Russia organised 15 trade promotion activities Amount of hotels built for Olympics (events) where Olympic business opportunities Salt Lake City 4 emerging in a wide range of industries were Turin ? highlighted. Vancouver 5 Sochi 16 Conclusion Amount of Olympic visitors/ million people Contracts arising from the Games cover all Salt Lake City 1,19 sectors, from architecture, engineering, construction management, transport, security, Turin 1 environmental planning, power engineering, Vancouver ? sport venue fit out (plant and equipment, Sochi ? seating, surfacing, lighting, IT), through to event delivery (security, recruitment, volunteering programmes, training, broadcasting, event management, media UK Trade & Investment Sector briefing: Olympic opportunities in Russia signage, ticketing, screens, temporary overlay, crowd control, transportation and branding), hospitality and catering. There has been identified a particular interest to UK companies providing newest technologies in construction, design and engineering services, project management, security equipment and security control management, legal advice, sound and broadcasting equipment, telecommunication equipment, environmental friendly vehicles, special equipment for the Paralympic Games and disabled people, as well as education services. If you have any questions on the opportunities above, contact the UKTI Olympic contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website UK Trade & Investment Sector briefing: Olympic opportunities in Russia Major events and activities UKTI contacts Seminar chaired by RF Deputy Minister of Irina Karabanova regional development on Olympics Mr. Senior Trade & Investment Adviser Yuri Reylian and Mayor of Sochi British Embassy Moscow Contact: UKTI Sochi/Olympics Sector Tel: (007 495) 956 7454 Email: irina.karabanova@fco.gov.uk Email: irina.karabanova@fco.gov.uk Time: June-July 2010 www.uki.gov.uk International Investments Forum "Sochi- Jason Goddard 2010" Deputy Head Contact: UKTI Sochi/Olympics Sector Global Sports Projects Email: irina.karabanova@fco.gov.uk UKTI HQ London Time: September 16-19, 2010 Tel: (0044 0) 20 7215 4394 Email: jason.goddard@ukti.gsi.gov.uk Outward Olympic mission to Moscow - www.ukti.gov.uk Sochi Contact: UKTI Sochi/Olympics Sector Email: irina.karabanova@fco.gov.uk Time: October 2010 Outward Construction mission with focus on the Krasnodar region projects Contact: UKTI Construction Sector Email: julia.mochalova@fco.gov.uk Time: October-November 2010 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events. UK Trade & Investment Sector briefing: Olympic opportunities in Russia Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Russian market are advised to you to meet contacts and promote your undertake as much market research and company in the Russian market planning as possible in the UK. UKTI?s team in Russia, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? List of SC Olympstroy tenders that will specialist advice, please visit the UKTI website be announced in 2010-2011 to find contact details for your local UKTI ? Recommendations and technical office. requirements for tendering procedures in Russia ? Validated list of Russian and international SC Olympstroy contractors ? Key market players or potential customers in the Russian market ? Establishment of interest of such contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Olympic opportunities in Russia
Posted: 26 January 2011, last updated 19 February 2011

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